Tweedy Browne on the Folly of Market Timing

Tweedy Browne is out with their semi-annual report. In the report, the managers of the famous value firm have some interesting comments about 'market timing.' A brief excerpt from the document followed by the letter embedded can be found below:

When it comes to the year ahead, those in the business of predicting market movements are seemingly looking at different facts since there is not much agreement among them. We are reminded in some ways of the presidential candidates’ discussion over taxes and the budget. Can they possibly be looking at the same data?

Now we certainly are not going to burden you with our politics and we are in no way trying to be smug in our comments about market “forecasting.” As we have said before, we believe the task of trying to get the “market direction” right over a limited time period is not the best way to evaluate the merits of any particular investment. Put simply, we operate with a different investment horizon and a different perspective.

As investors, we own businesses and we like the productive capital building nature of their assets. Our job is to try and determine what that business will look like in three to five years and buy it at a discount from our estimate of business value. If we can get these variables about right, our expectation is we will make out very well over time.

About the author

Founder and CEO of ValueWalk.com (the “Site”) is a web site owned by VALUEWALK LLC, a New Jersey limited liability corporation.
I am the former VP of business Development of SumZero, LLC, the world’s largest community I have prior experience in a value based pe firm focused on PIPE transactions in micro-cap companies, and at a value based research firm, which focused on smid caps.